OFFICE OF THE MAYOR
CITY OF CHICAGO
RAHM EMANUEL MAYOR
April 19,2017
TO THE HONORABLE, THE CITY COUNCIL OF THE CITY OF CHICAGO
Ladies and Gentlemen:
I transmit herewith a resolution regarding "Contract for Deed" financing. Your favorable consideration of this resolution will be appreciated.
Mayor
Very truly yours,
RESOLUTION
WHEREAS, a contract for deed sale, also known as a land sales contract, land installment contract, or rent-to-own contract, is a financing method whereby the seller retains the legal title to the property until the homebuyer finishes paying all principal payments and interest owed under the contract; and
WHEREAS, Contract for deed sales are only minimally regulated under Illinois law and prone to contain misleading and unfair terms and conditions; and
WHEREAS, Because of the lack of regulation, contract for deed agreements are sometimes oral, contracts are often not recorded, the buyers lack the protections enjoyed by purchasers in conjunction with a mortgage, contracts are unclear about responsibilities for paying property taxes, paying insurance, making repairs, and are often structured with hidden interest and balloon payments imposed on the buyer; and
WHEREAS, African-American and Latino communities are disproportionately targets of contract for deed sales; and
WHEREAS, Less sophisticated buyers can more easily be caught up in the lure of owning a home because the lack of protections leave them less informed about the challenges the property may present; and
WHEREAS, Contracts for deed sales can result in the buyers investing all of their money into the property and then losing it all simply because they missed one payment; and
WHEREAS, Contracts for deed sales allow the seller to avoid health and safety regulations, and crucial repairs to the property, while transferring the burden of repairing and maintaining the property to the homebuyer; and
WHEREAS, Contracts for deed sales are often consummated between the home-buyer a...
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